Healthy Skepticism Library item: 18982

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Publication type: news

Jack A
Italy limits price cuts on medicine
EATG 2010 Jun 4
http://www.eatg.org/eatg/Global-HIV-News/EU-Policy/Italy-limits-price-cuts-on-medicine

Full text:

Ferruccio Fazio will help tackle medicine bills by introducing UK-style incentives to reward doctors for reducing the overall volume of drugs and increasing the proportion of cheaper generics among those that remain.
Italy’s health minister has pledged to limit fresh cuts on the price of patented medicines by instead pushing for greater use of lower-cost generic alternatives.

Ferruccio Fazio told the FT that he would help tackle medicine bills by introducing UK-style incentives to reward doctors for reducing the overall volume of drugs and increasing the proportion of cheaper generics among those that remain.

“The pharmaceutical industry is not happy and we feel [their prices] are well controlled,” he said. “The problem is not discounts [of patented drugs] but volumes. We will consider giving incentives to GPs.”

His comment came as Italy on Wednesday announced plans to sharply reduce generic drug prices, becoming the latest in a series of EU countries taking measures to tackle rising health costs as they attempt to reduce their budget deficits.

The move reflects efforts to balance the need for continued incentives to stimulate research and development in new medicines with the need for lower overall drug bills that do not destabilise the quality of the European generic companies.

Italy is one of the pharmaceutical industry’s largest European markets by sales, but officials have become concerned that there is insufficient “generic substitution”, or switching to cheaper off-patent drugs.

They also see scope for imposing significantly larger price reductions once patents expire on drugs, permitting generic competition.

The latest measures in the government’s austerity package would impose a 12.5 per cent cut on generic drug prices this year, and introduce tenders next year with the health system only allowed to buy products at the cheapest bid.

Germany and the Netherlands have also introduced tenders, although generic drug companies are concerned that such moves may jeopardise quality and undermine the survival of a range of rival low cost drug manufacturers.

Mr Fazio said he hoped to boost efficiency and cut the drug bill by centralising procurement and increasing greater flexibility for the purchase of drugs that have up till now only been acquired by hospitals.

He also said he was considering ways to reduce late payment of drug bills by Italy’s regions, triggering delays that have helped push up manufacturers’ prices.

But he placed particular emphasis on “rational prescribing” to persuade doctors to reduce their prescriptions of unnecessary medicines such as antibiotics, and to switch to the cheapest and most beneficial treatments, which he estimated could save €400m ($492m) a year.

“We will oblige doctors to prescribe in the proper way,” he said. “We have a lot to do to improve appropriate prescribing, and stop people hoarding drugs at home.”

But he ruled out co-payments, introduced in some countries such as France as a disincentive for patients to unnecessarily visit doctors, or in the UK through prescription charges.